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| R | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|---|-----------------------------------------------------------------------------------------|

| £ | TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|--------|------------------------------------------------------------------------------------|

| Colorado                                                       | 84-0888594                           |
|----------------------------------------------------------------|--------------------------------------|
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |

| 1530 – 9th Avenue S.E., Calgary, Alberta | T2G 0T7    |
|------------------------------------------------|------------|
| (Address of principal executive offices)       | (Zip Code) |

|   |
|--------|

|   | (1) Yes [X] No [  ] |
|--------|-------------------------------|
|   | (2) Yes [X] No [  ] |

|   | Yes [  ] No [  ] |
|--------|--------------------------------------|

| Large accelerated filer                       | [  ] | Accelerated filer         | [  ] |
|-----------------------------------------------|----------------|---------------------------|----------------|
| Non-accelerated filer                         | [  ] | Smaller reporting company | [X]            |
| (Do not check if a smaller reporting company) |           |                      |           |

|   |  Yes [  ] No [X] |
|--------|---------------------------------|

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|   |  Yes [  ] No [  ] |
|--------|--------------------------------------------|

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|                                                                                                                 | Page   |
|----------------------------------------------------------------------------------------------------------------------|--------|
| PART I                                                                                                               |   |
| Item 1.   Financial Statements                                                                        | 3      |
|                                                                                                                 |   |
| Item 2.   Management’s Discussion and Analysis of Financial Condition and Results of Operations | 4      |
|                                                                                                                 |   |
| Item 3.    Quantitative and Qualitative Disclosures About Market Risk                            | 7      |
|                                                                                                                 |   |
| Item 4T.  Controls and Procedures                                                                          | 7      |
|                                                                                                                 |   |
| PART II                                                                                                              |   |
|                                                                                                                 |   |
| Item 1.   Legal Proceedings                                                                           | 8      |
|                                                                                                                 |   |
| Item 1A. Risk Factors                                                                                                | 8      |
|                                                                                                                 |   |
| Item 2.   Unregistered Sales of Equity Securities and Use of Proceeds                                 | 8      |
|                                                                                                                 |   |
| Item 3.   Defaults Upon Senior Securities                                                             | 8      |
|                                                                                                                 |   |
| Item 4.   Submission of Matters to a Vote of Security Holders                                         | 8      |
|                                                                                                                 |   |
| Item 5.   Other Information                                                                           | 8      |
|                                                                                                                 |   |
| Item 6.   Exhibits                                                                                    | 9      |
|                                                                                                                 |   |
| Signatures                                                                                                           | 9      |

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|                                                         |       |
|--------------------------------------------------------------|------------|
|                                                         | Page       |
|                                                         |       |
| Unaudited Consolidated Financial Statements                  |       |
|                                                         |       |
| Consolidated Balance Sheets                                  | F-1        |
|                                                         |       |
| Consolidated Statements of Operations and Comprehensive Loss | F-2        |
|                                                         |       |
| Consolidated Statements of Cash Flows                        | F-3        |
|                                                         |       |
| Notes to Unaudited Consolidated Financial Statements         | F-4 to F-7 |
|                                                         |       |

----

| FACT CORPORATIONConsolidated Balance Sheets(Unaudited)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   | June 30, 2009 |   |   | December 31, 2008 |   |
|                                                                                         ASSETS |   |   |   |   |   |   |
| Current Assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   |   |   |   |   |
| Cash                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   | $ | 59,863 |   |   | $ | 230,341 |   |
| Inventory                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |   | 39,882 |   |   |   | 131,170 |   |
| Accounts receivable                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |   | 43,340 |   |   |   | 107,702 |   |
| Prepaid expense                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |   | 2,144 |   |   |   | 3,391 |   |
| Total Current Assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |   | 145,229 |   |   |   | 472,604 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |   |   |   |   |   |   |   |
| Investment in Capital Reserve Canada Ltd.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |   | 56 |   |   |   | 88 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |   |   |   |   |   |   |   |
| Property and Equipment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |   |   |   |   |   |   |   |
| Intellectual property                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |   | 874,431 |   |   |   | 998,950 |   |
| Real Property (net of accumulated depreciation of  $1,121 and $988)                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |   | 510 |   |   |   | 643 |   |
| Total Property and Equipment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |   | 874,941 |   |   |   | 999,593 |   |
| Total Assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   | $ | 1,020,226 |   |   | $ | 1,472,285 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |   |   |   |   |   |   |   |
| LIABILITIES AND STOCKHOLDERS’ DEFICIT                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |
| Current Liabilities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |   |   |   |   |   |   |   |
| Accounts payable and accrued expenses                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   | $ | 520,943 |   |   | $ | 561,911 |   |
| Accounts payable (related parties)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |   | 590,713 |   |   |   | 559,940 |   |
| Other current liabilities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |   | 3,393 |   |   |   | - |   |
| Loans payable (related parties)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |   | 1,159,986 |   |   |   | 913,243 |   |
| Loan payable                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |   | 178,264 |   |   |   | 458,906 |   |
| Current portion of long-term debt and acquisition cost                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |   | 150,000 |   |   |   | 129,953 |   |
| Total Current Liabilities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |   | 2,603,299 |   |   |   | 2,623,953 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |   |   |   |   |   |   |   |
| Long-Term Liabilities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |   |   |   |   |   |   |   |
| Acquisition cost payable                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |   | 1,447,184 |   |   |   | 1,523,931 |   |
| Total Long-Term Liabilities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |   | 1,447,184 |   |   |   | 1,523,931 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |   |   |   |   |   |   |   |
| Total Liabilities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |   | 4,050,483 |   |   |   | 4,147,884 |   |
| Commitments and contingencies                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |   |   |   |   |   |   |   |
| Stockholders' Deficit                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |   |   |   |   |   |   |   |
| Class A Common Stock - authorized 100,000,000 shares of no par value; 17,154,406 issued and outstanding as at June 30, 2009  and December 31, 2008                                                                                                                                                                                                                                                                                                                                                                                      |   |   |   23,103,924 |   |   |   |   23,103,924 |   |
| Class A Common stock warrants                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |   | - |   |   |   | - |   |
| Additional paid in capital                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |   | 460,114 |   |   |   | 428,770 |   |
| Accumulated deficit                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |   | (26,720,013 | ) |   |   | (26,344,646 | ) |
| Accumulated other comprehensive income                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |   | 125,718 |   |   |   | 136,353 |   |
| Total Stockholders' Deficit                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |   | (3,030,257 | ) |   |   | (2,675,599 | ) |
| Total Liabilities and Stockholders' Deficit                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   | $ | 1,020,226 |   |   | $ | 1,472,285 |   |

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| FACT CORPORATIONConsolidated Statements of Operations and Comprehensive Loss(Unaudited) |   |
|-----------------------------------------------------------------------------------------|--------|
|                                                                                    |   | For the three months endedJune 30, |   |   | For the six months endedJune 30, |   |
|                                                                                    |   | 2009 |   |   | 2008 |   |   | 2009 |   |   | 2008 |   |
| Revenues                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |
| Functional food premix                                                                  |   | $ | 189,000 |   |   | $ | 376,389 |   |   | $ | 651,234 |   |   | $ | 1,038,341 |   |
| Rental income (net of operating expenses)                                               |   |   | 21,066 |   |   |   | 14,155 |   |   |   | 38,108 |   |   |   | 28,393 |   |
|                                                                                    |   |   | 210,066 |   |   |   | 390,544 |   |   |   | 689,342 |   |   |   | 1,066,734 |   |
|                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Costs of Goods Sold – Functional food premix                                      |   |   | 150,998 |   |   |   | 282,729 |   |   |   | 540,218 |   |   |   | 833,234 |   |
|                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Gross Profit                                                                            |   |   | 59,068 |   |   |   | 107,815 |   |   |   | 149,124 |   |   |   | 233,500 |   |
|                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Costs and Expenses                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Legal                                                                                   |   |   | 19,770 |   |   |   | 47,083 |   |   |   | 38,505 |   |   |   | 73,804 |   |
| Consulting fees                                                                         |   |   | 55,311 |   |   |   | 43,748 |   |   |   | 133,122 |   |   |   | 88,122 |   |
| Depreciation and amortization                                                           |   |   | 62,328 |   |   |   | 62,339 |   |   |   | 124,652 |   |   |   | 124,678 |   |
| Stock based compensation                                                                |   |   | 31,344 |   |   |   | - |   |   |   | 31,344 |   |   |   | - |   |
| Other Administrative expenses                                                           |   |   | 89,690 |   |   |   | 67,500 |   |   |   | 135,746 |   |   |   | 145,537 |   |
|                                                                                    |   |   | 258,443 |   |   |   | 220,670 |   |   |   | 463,369 |   |   |   | 432,141 |   |
| (Loss) from operations                                                                  |   |   | (199,375 | ) |   |   | (112,855 | ) |   |   | (314,245 | ) |   |   | (198,641 | ) |
| Other income and expenses                                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Unrealized gain (loss)  on disposal of marketable securities                  |   |   | - |   |   |   | - |   |   |   | (32 | ) |   |   | - |   |
| Tax (Paid) /refunded                                                                    |   |   | - |   |   |   | 1 |   |   |   | - |   |   |   | (308 | ) |
| Interest expense                                                                        |   |   | (29,777 | ) |   |   | (24,241 | ) |   |   | (61,090 | ) |   |   | (48,543 | ) |
|                                                                                    |   |   | (29,777 | ) |   |   | (24,240 | ) |   |   | (61,122 | ) |   |   | (48,851 | ) |
|                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Provision for income taxes                                                              |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net (Loss)                                                                              |   | $ | (229,152 | ) |   | $ | (137,095 | ) |   | $ | (375,367 | ) |   | $ | (247,492 | ) |
|                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net (Loss) per Common Share, basic and diluted                                          |   | $ | (0.01 | ) |   | $ | (0.01 | ) |   | $ | (0.02 | ) |   | $ | (0.01 | ) |
|                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Weighted Average Number of Common Shares Used in calculation                            |   |   | 17,154,406 |   |   |   | 17,154,406 |   |   |   | 17,154,406 |   |   |   | 17,154,406 |   |
|                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Comprehensive loss                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net loss                                                                                |   | $ | (229,152 | ) |   | $ | (137,095 | ) |   | $ | (375,367 | ) |   | $ | (247,492 | ) |
| Foreign currency translation adjustment                                                 |   |   | (14,478 | ) |   |   | (4,188 | ) |   |   | (10,635 | ) |   |   | 6,711 |   |
| Comprehensive loss                                                                      |   | $ | (243,630 | ) |   | $ | (141,283 | ) |   | $ | (386,002 | ) |   | $ | (240,781 | ) |

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| FACT CORPORATIONConsolidated Statements of Cash Flows(Unaudited) |   |
|------------------------------------------------------------------|--------|
|                                                             |   | For the six months endedJune 30, |   |
|                                                             |   | 2009 |   |   | 2008 |   |
|                                                             |   |   |   |   |   |   |
| Cash From Operating Activities:                                  |   |   |   |   |   |   |
| Net (loss)                                                       |   | $ | (375,367 | ) |   | $ | (247,492 | ) |
| Reconciling adjustments                                          |   |   |   |   |   |   |   |   |
| Depreciation, depletion and amortization                         |   |   | 124,652 |   |   |   | 124,678 |   |
| Accrued interest                                                 |   |   | 61,090 |   |   |   | 34,144 |   |
| Stock based compensation                                         |   |   | 31,344 |   |   |   | - |   |
| Unrealized loss on securities                                    |   |   | 32 |   |   |   | - |   |
| Changes in operating assets and liabilities                      |   |   |   |   |   |   |   |   |
| Accounts receivable                                              |   |   | 64,218 |   |   |   | 70,725 |   |
| Inventory                                                        |   |   | 91,288 |   |   |   | (178,785 | ) |
| Prepaid Expense                                                  |   |   | 1,293 |   |   |   | - |   |
| Payroll liabilities                                              |   |   | 3,393 |   |   |   |   |   |
| Accounts payable and accrued expenses                            |   |   | (19,839 | ) |   |   | 85,225 |   |
| Net Cash Flows Used In Operating Activities                      |   |   | (17,896 | ) |   |   | (111,505 | ) |
|                                                             |   |   |   |   |   |   |   |   |
| Cash From Financing Activities:                                  |   |   |   |   |   |   |   |   |
| Loan proceeds                                                    |   |   | - |   |   |   | 77,295 |   |
| Loan repayment                                                   |   |   | (95,842 | ) |   |   | - |   |
| Acquisition cost payable                                         |   |   | (56,700 | ) |   |   | (50,032 | ) |
| Net Cash Flows Used In Financing Activities                      |   |   | (152,542 | ) |   |   | 27,263 |   |
|                                                             |   |   |   |   |   |   |   |   |
| Foreign currency translation adjustment                          |   |   | (40 | ) |   |   | 6,315 |   |
|                                                             |   |   |   |   |   |   |   |   |
| Net change in cash and cash equivalents                          |   |   | (170,478 | ) |   |   | (77,927 | ) |
| Cash at beginning of period                                      |   |   | 230,341 |   |   |   | 105,053 |   |
| Cash at end of period                                            |   | $ | 59,863 |   |   | $ | 27,126 |   |
|                                                             |   |   |   |   |   |   |   |   |
| Supplemental disclosure of cash flow information:                |   |   |   |   |   |   |   |   |
| Interest paid                                                    |   | $ | - |   |   | $ | 14,392 |   |
| Income taxes paid (refund)                                       |   | $ | - |   |   | $ | 308 |   |
|                                                             |   |   |   |   |   |   |   |   |

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The management’s discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP").  The following discussionof our financial condition and results of operations should be read in conjunction with our audited consolidated financial statements for the years ended December 31, 2008, and 2007, together with notes thereto.  As used in this quarterly report, the terms "we", "us", "our", and the "Company" mean FACT Corporation, unless the context clearly requires otherwise. 

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| ·   | Net revenues in the six months ended June 30, 2009 decreased by 36% over the comparative six month period with a 35% reduction to gross revenues; |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Operating expenses for the six months ended June 30, 2009 increased by 7% over the comparative six month period.  The Company recorded an expense of $31,344 related to stock based compensation with respect to the issuance a total of 110,000 stock options to a new hire.   The Company reported a decrease of 48%  to legalexpenses and a decrease of 7% to general administrative  expenses, with an increase to consulting fees of 51% period over period, as a result of recruitment fees paid with respect to a new hire during the period, increased salary costs as a result of the hire, and the retention of a consultant to assist in the Company’s three year forward-planning and acquisition strategies; |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The Company’s net loss for the six months ended June 30, 2009 increased by 52% over the comparative period predominantly as a result of decreased net revenue, an increase to interest expense and  overall operating expenses. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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Evaluation of Disclosure Controls and Procedures 

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| REGULATION S-K NUMBER | EXHIBIT                                                                                                                      |   | REFERENCE                                                                                                                                                                          |
|-----------------------|------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 3.1(i)                | Articles of Incorporation, as amended                                                                                        |   | Incorporated by reference to the Exhibits previously filed with Capital Reserve Corporation’s Annual Report on Form 10-KSB for the fiscal year ended December 31, 1990  |
| 3.1(ii)               | Articles of Amendment to Articles of Incorporation, filed with the State of Colorado Secretary of State on November 26, 2001 |   | Incorporated by reference to the Exhibits previously filed with FACT Corporation’s Annual Report for Form 10-KSB for the fiscal year ended December 31, 2002            |
| 3.1(iii)              | Articles of Amendment to Articles of Incorporation, filed with the State of Colorado Secretary of State on February 8, 2002  |   | Incorporated by reference to the Exhibits previously filed with FACT Corporation’s Annual Report for Form 10-KSB for the fiscal year ended December 31, 2002            |
| 3.2                   | Amended Bylaws                                                                                                               |   | Incorporated by reference to the Exhibits previously filed with Capital Reserve Corporation’s Annual Report on Form 10-KSB for the fiscal year ended December 31, 1994  |
| 10.1                  | 2008 Stock Option and Stock Award Plan                                                                                       |   | Incorporated by reference to the Exhibits previously filed with FACT Corporation’s Definitive 14C on August 22, 2008.                                                   |
| 31(i)(ii)             | Section 302 Certification - Principal Executive Officer and Principal Financial Officer                                 |   | Filed herewith                                                                                                                                                                     |
| 32                    | Certification Pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002        |   | Filed herewith                                                                                                                                                                     |

| Date: August 12, 2009 | By:    | /s/ Jacqueline Danforth                                                  |   |
|-----------------------|--------|-------------------------------------------------------------------------------|--------|
|                  |   | Name: Jacqueline Danforth                                                |   |
|                  |   | Title: President, Principal Executive, Financial and Accounting Officer  |   |
|                  |   |                                                                          |   |

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